8-1901-11335-2

MN OSH Division Docket No. 5178

OSHI ID No. S1941 053-94

 

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF LABOR AND INDUSTRY

 

Gary W. Bastian, Commissioner,

Department of Labor and Industry, State of Minnesota,

                   Complainant,

v.

J & L Schwieters, Construction, Inc.,

                   Respondent.

 

 

ORDER DENYING

MOTION TO DISMISS

            The above-entitled matter is pending before the undersigned administrative law judge pursuant to a Notice of and Order for Prehearing Conference and Notice to Employees dated September 10, 1997, and a Complaint and a Summons and Notice to Respondent dated February 11, 1997.

            Nancy J. Leppink and Susan C. Gretz, Assistant Attorneys General, 525 Park Street, Suite 200, St. Paul,  MN  55103-2106 have appeared on behalf of the complainant.  Gregg J. Cavanagh, Leonard, Street and Deinard, Attorneys at Law, 150 South Fifth Street, Suite 2300, Minneapolis,  MN 55402, has appeared on behalf of respondent.

On October 2, 1997, respondent filed a Motion to Dismiss the complaint in this case on the grounds that it was not timely served under Minn. Stat. § 182.661, subd. 6 and on the grounds that the delay in issuing the complaint was prejudicial to respondent.  On October 16, 1997 the complainant filed his Memorandum in Opposition to Respondent’s Motion to Dismiss arguing that the time limit for issuing a complaint in Minn. Stat. § 182.661, subd. 6 is not mandatory and that the respondent has not suffered any prejudice as a result of complainant’s delay in issuing his Complaint.

Neither party requested oral argument and the administrative law judge, mistakenly believing that respondent did not intend to reply to complainant’s objections, issued an order on November 3, 1997 denying respondent’s motion to dismiss.  The next day, respondent filed a timely reply brief and additional affidavits.  That filing requires the administrative law judge to reopen and reconsider the respondent’s motion.

            Based upon all of the files, records and proceedings herein, and for the reasons set forth in the accompanying Memorandum,

IT IS HEREBY ORDERED:

1.         The Order Denying Motion to Dismiss dated November 3, 1997 is WITHDRAWN.

2.         The respondent’s Motion to Dismiss should be and it hereby is DENIED.

            3.         A prehearing conference herein shall be held at this office commencing at 1:00 p.m. on December 5, 1997.

 

Dated this 12th day of November, 1997

 

                                                                             

 

JON L. LUNDE

Administrative Law Judge

 

MEMORANDUM

I.

 

            The facts relevant to respondent’s motion are not in dispute.  On September 28 and 29, 1994 an occupational safety and health (OSH) inspection of respondent’s work site was made in response to a serious injury sustained by one of the respondent’s employees.  Subsequently, on February 28, 1995, citations and penalty notices were timely served on respondent.  On March 20,  1995, respondent timely filed a notice of contest challenging the citations and penalties.

 

            The citations relate to the absence of fall protection: the absence of a Written Workplace Accident and Injury Reduction (AWAIR) Program, an employee’s failure to use a seatbelt while operating a forklift; the absence of a ladder connecting the third floor and the roof where employees were working; the absence of a written right-to-know training program; the failure to develop a program to instruct employees on the effects of heat stress and excessive noise; and painting the outer surfaces of employee helmets without the manufacturer’s approval.

            On June 5, 1995, complainant’s attorney, Helen Rubenstein, and Roger Bastyr, an agency staff member, met with respondent’s attorneys and other representatives in an informal conference to discuss the citations.  The parties were unable to settle the matter at that time, but respondent agreed to consider making a settlement proposal and provide some of its training documents to Rubenstein by June 12, 1995 -- seven days before the complaint was due to be served under the pertinent statute.

 

            Rubenstein didn’t receive the settlement proposal or the training documents by June 12.  On July 13, she telephoned Cavanagh and left a message reminding him that he was to provide her with those documents.  Cavanagh did not respond, and on July 17 Rubenstein wrote to him about the matter.  On July 23, 1995, Cavanagh wrote to Rubenstein advising her that no settlement proposal would be made at that time.  He also told her that the training documents complainant had requested were ready for inspection.  In August, a legal assistant for complainant, reviewed the training documents at Cavanagh’s office and asked for copies of some of them.  They were mailed about August 16, 1995.

 

            Rubenstein did not serve a complaint by the June 19, 1995 deadline because she was expecting a settlement proposal from the respondent.  She did not have an explanation for failing to serve a complaint after July 23 when she was advised that respondent didn’t intend to make a settlement offer.  After July 23, no settlement negotiations were being conducted and, in January 1996, Rubenstein transferred out of the attorney general’s labor division and this matter was reassigned to Leppink.  Leppink took no immediate action to serve a complaint.  During a 30-day period from June to July 1996, Leppink was on a detail in Washington D.C.  Later, in November, Leppink was on maternity leave.  When she began maternity leave this matter was reassigned to Gretz and Leppink instructed a departmental paralegal, Carrie Darmody, to review the file to determine the complainant’s settlement options and discovery needs.  When Darmody realized that no complaint had been filed, Gretz was informed, and on February 11, 1997, the complaint was served.  Respondent timely served its answer to the complaint.

II.

Respondent’s Motion to Dismiss is based, in part, on Minn. Stat. § 182.661, subd. 6 (1994) which states:

 

The Commissioner shall serve a complaint on all the parties no later than 90 calendar days after receiving a notice of contest. . . .

 

This statutory provision is repeated in Minn. R. 5210.0570, subp. 1 (1996 Supp. No. 2).  Respondent argues that dismissal is mandatory because it was not served within the 90-day time limit in the statute and because it was prejudiced by the delay.

            Complainant argues that the 90-day deadline for serving a complaint under the statute is not a mandatory deadline because motions to dismiss late-filed complaints are discretionary with the administrative law judge (ALJ) under Minn. R. 5210.0570, subp. 5 (1996 Supp. No. 2), which states:

 

If the complaint is not served or the answer is not filed and served within the time prescribed by this part, the administrative law judge, upon a motion by a party, may enter an order affirming or vacating the contested citation and notification of penalty or notification of failure to abate.[1]

 

            The commissioner apparently concluded that the 90-day deadline for serving a complaint is not mandatory but only directory.  When a statute does not declare the consequences for failure to comply with a temporal requirement it is generally held to be directory not mandatory.  No penalty is specified for noncompliance with the time limit for serving complaints.  In contrast, the legislature has said that when an employer fails to file a timely notice of contest, the citations and penalties, as proposed, “shall be deemed a final order of the commissioner and not subject to review by any court or agency.”  Minn. Stat. § 182.661, subd. 1 (1994).

            The rule may be based on federal OSH procedures.  The federal Occupational Safety and Health Act does not contain a deadline for filing complaints.  However, the federal review commission’s rule -- 29 C.F.R. § 2200.34 (1996) -- states that the secretary of labor -- “shall file a complaint with the commission no later than 20 days after receipt of the notice of contest.”  Another rule -- 29 C.F.R. § 2200.41 -- states that the secretary “may” be declared to be in default for failing to file a timely complaint.  Hence, default is not automatic, and the federal review commission as well as federal ALJs have discretion in determining whether a complaint should be stricken and the secretary defaulted.  There is no evidence in the record suggesting that the state is required to have a similar rule under the federal Occupational Safety and Health Act of 1970.

 

            Because dismissal of a late-filed complaint is discretionary under Minn. R. 5210.0570, subp. 5, the ALJ must decide if dismissal is appropriate on some other ground; the ALJ cannot decide if the rule is valid (i.e., consistent with Minn. Stat. § 182.661, subd. 6 (1994))[2], and the ALJ has no authority to invalidate the rule.  Instead, the ALJ must attempt to harmonize the rule with the statute.  The only way that can be done is to treat the 90-day deadline as a directory provision.

 

            Respondent argues that it was prejudiced by Complainant’s tardy service of the complaint and that there are, therefore, other grounds for dismissal.  On the other hand, complainant argues, citing federal precedents and prior ALJ decisions in Minnesota, that dismissal is inappropriate in this proceeding because respondent was not prejudiced by the delay and complainant has not engaged in any contumacious conduct.

 

III

 

            The federal review commission has held, in effect, that noncompliance with its procedural rules generally should not result in dismissal because the policy of the law is to hear disputes on their merits[3].  Therefore, it has held that a late-filed complaint generally should not be dismissed unless the employer was prejudiced by the delay or the agency engaged in contumacious conduct.  Asarco, Inc., Hughes Tool Co., 1980 OSHD 24,838 (Rev. Comm. 1980).  See also, Secretary v. Piping of Ohio, Inc., 16 OSH Cas. (BNA) 1236, 1993-1995 OSHD ¶ 30,028 (Rev. Comm. 1993), aff’d, 25 F.3d 1049 (6th Cir.), cert. den. 513 U.S. 1016 (1994).  See also Jensen Construction Co., of Oklahoma, Inc. v. OSHRC (Marshall), 1979 OSHD ¶23, 514, 597 F.2d 246-47 (10th Cir. 1979) (28-day delay allowed due to extraordinary caseload); Rollins Outdoor Advertising Inc., 5 O.S.H.C. (BNA) 1041, 1977-1978 OSHD ¶ 21, 551 (Rev. Comm. 1977) (14-day delay allowed due to understaffing of secretarial personnel).  Pitt-Des Moines, Inc., 16 OSHC 1429, 1993 OSHD ¶ 30,225 (Rev. Comm. 1993) (28-day delay allowed due to extraordinary caseload).  Prior decisions under the Minnesota OSH act are consistent with these federal precedents.  Commissioner v. Richard Knutson, Inc., OAH Docket No. 4-1901-8136-2 (August 27, 1993) (seven-month delay allowed due to lost file); Bastien v. Fagen, Inc., OAH Docket No. 1-1901-10449-2 (April 12, 1996) (two-month delay allowed due to miscommunication between agency and the attorney general).

 

            The factors considered by the federal review commission in determining whether an OSH citation should be dismissed are similar to the factors considered by the courts in deciding whether to dismiss an action for a party’s failure to prosecute it or to comply with procedural rules under Rule 41.02(a), Minn. R. Civ. P.

 

            In deciding whether an action should be dismissed under Rule 41, the Minnesota courts have held that two factors must be shown:  (1) prejudice to the defendant and (2) an unreasonable and inexcusable delay.  Scherer v. Hanson, 270 N.W.2d 23, 24 (Minn. 1978).  The court has adopted these stringent standards because of its preference for having disputes tried on their merits.  Bonhiver v. Fugelso, Porter, Simich, Etc., 355 N.W.2d 138, 144 (Minn. 1984).  Dismissals under Rule 41 for failure to comply with procedural rules may require the same showing of prejudice and inexcusable delay as dismissals for failing to prosecute.  2 Herr & Haydoch, Minnesota Practice § 41.18 (1985).

            Inexcusable delays are similar to contumacious conduct.  The contumacious conduct which may result in dismissal in federal OSHA cases is conduct which evinces contempt for orderly proceedings and the hearing process.  In TRG Drilling Corp (Mid-Continent Division), 1982 OSHD ¶ 25,837 (Rev. Comm. 1981), the federal commission dismissed a complaint which was 29 days late because the agency made no request to extend the service deadline, failed to explain the reason for the delay, and failed to respond to the employer’s motion to dismiss the complaint as untimely.  Complainant arguably has not engaged in contumacious conduct.  However, its failure to file a timely complaint or request an extension of the service date was unreasonable and inexcusable.  The record contains no explanation or rational excuse for its failure to act.  Therefore, the sole issue that must be decided is whether respondent was prejudiced by the delay.  If it was, the complaint and the proposed citations and penalties should be dismissed.

 

IV

 

            John H. Schwieters is respondent’s president.  He has held that position since 1980 and has always been responsible for respondent’s day-to-day operations.  At the time of the inspection which led to the citations in this case, the following Schwieters employees were on the job:  Gregg Bieganek, Tom Corbett, Keith Duckett, Jason Eatros, Jeff Homich, Peter Kulzer, Terry Ostrom and Kyle Schufelt.  Homich and Ostrom were supervisory employees.  Currently, four of those employees still work for Schwieters:  Bieganek, Eatros, Kulzer and Schufelt.  Duckett left in January 1995; Corbett left in May 1996; Ostrom left in November 1996; and Homich left in December 1996.  Corbett, Ostrom and Homich went to work for one of Schwieters competitors.  The competitor -- Larry Barnabow Builders, Inc. -- was formed by Larry Barnabow who had also been employed by Schwieters as a project manager at the time of the September 1994 inspection.  Schwieters has had no contact with Duckett, Corbett, Ostrom or Homich since they left Schwieters.

 

            In July 1997, Darmody reviewed a district court file which involved a civil suit filed by Kyle Shufelt against Kraus-Anderson and Northwest Minnesota Multi-County H.R.A.  That lawsuit involved Shufelt’s fall from the roof of a building at the respondent’s worksite in Crookston.  It precipitated the OSHA inspection of the worksite subsequently undertaken by complainant.  Darmody Affidavit ¶4.  During her review of the file, Darmody discovered that depositions were taken of at least five of the respondent’s employees:  Ostrom, Corbett, Homich, Kulzer, and Shufelt.  Those depositions are available for purchase.  Id at 6 and 7.  Darmody also obtained the addresses and telephone numbers of three of those employees -- Corbett, Ostrom and Homich -- and she located an individual who knows Kulzer.  He apparently worked for the respondent as a safety coordinator.

 

V

 

            In its motion to dismiss, respondent argued that it was prejudiced by complainant’s delay because several employees, including the job site supervisor, have left respondent’s employment.  Because no complaint was served in a timely fashion, respondent argued that it didn’t interview those employees and it alleges that their whereabouts are presently unknown.  Respondent avers that the delay “has made it difficult if not impossible” to interview those witnesses and obtain evidence from them.  Because its ability to defend allegedly has been impaired, respondent argues that dismissal is appropriate.

 

            In American Plasticraft Company, 1981 OSHD ¶25,507 (1981), a federal ALJ denied the secretary’s motion to file a complaint 235 days late.  The secretary argued that late filing was excusable because the matter had been misfiled.  The judge found, however, that the employee would have been substantially prejudiced and its ability to prepare an adequate defense impaired if the secretary’s motion were granted because documents prepared in anticipation of litigation were no longer available and could not be reconstructed, witnesses were no longer known, and the physical condition of the inspection site had been substantially modified in an effort to abate the allegedly unsafe conditions.  The respondent has failed to show those kinds of prejudice in support of its motion.

            The respondent has the burden of proof to establish that it has been prejudiced as a result of complainant’s failure to serve its complaint within the 90-day deadline set forth in the statute.  Respondent alleges that it was prejudiced in a number of ways.  First, it argued that if the complaint had been timely served all but one of the employees who had been present at the time of the inspection were still employed by it and that it would have had ready access to those employees during regular hours.  Respondent argues that those employees had a duty of loyalty to Schwieters and would have been required to cooperate with it in defending itself in this proceeding.  In addition, it argued that the employees who left have no direct incentive to cooperate with Schwieters and respondent suggested that it might be in the best interest of those employees not to cooperate with respondent.  None of these arguments persuasively establish prejudice.

            Although it might have made it easier for respondent to defend itself in this proceeding if all of the employees with knowledge of pertinent facts were still employed by it, the mere fact that some of them now work elsewhere does not constitute prejudice.  A showing of prejudice requires evidence that the delay has impaired its ability to defend itself on the merits.  That some employees now work elsewhere, even if that creates an inconvenience, does not establish prejudice because there is no evidence that those employees cannot be summoned to testify or that they don’t remember pertinent facts.  Prejudice “must be more than the ordinary expense and inconvenience of trial preparation, and is not presumed by the mere fact of delay.”  Wherley v. Foss, 416 N.W.2d 463, 464 (Minn. Ct. App. 1987).  The suggestion that former employees have no incentive to cooperate with respondent and my be hostile to respondent has no evidentiary support in the record.

            Respondent’s assertions of prejudice are weakened further due to the depositions that were taken of its employees in connection with a civil suit arising out of an incident which led to the inspection of its worksite.  It is likely that the depositions covered conditions involved in one or more of the citations in this proceeding.  Some of the other citations relate to the establishment of safety programs.  There is no evidence that John Schwieters doesn’t know whether respondent had such programs and there is no evidence that any essential witness is unavailable to testify.

            Respondent argued that the deposition transcripts of its former employees do not cure the prejudice it has suffered because it was not a party to the civil suit and there is no reason to believe that issues of interest to it were covered by the depositions.  Also, it argued that it could have avoided the costs of obtaining the former employees depositions if they were still in its employ.  These arguments are unpersuasive.

            General assertions of prejudice are insufficient to establish prejudice.  Asarco, Inc., Hughes Tool Co., supra at p. 30,620.  Firoved v. General Motors Corporation, 152 N.W.2d 364, 368 (Minn. 1967).  The respondent’s generalized assertions of prejudice should, therefore, be rejected.  As the delay in filing a complaint becomes progressively longer, the burden of establishing prejudice probably diminishes, and, at some point, prejudice may be presumed.  In this case, however, the employer’s evidence of prejudice was wholly inconclusive and unpersuasive.  Consequently, its motion should be denied and the complaint accepted.

            There is no evidence in the record that the complainant has previously failed to serve complaints in a timely fashion and it is important to hear OSHA matters on their merits because of their effect on worker safety.  The interest in workers safety outweighs the respondent’s interest in timely receipt of the complaint absent a showing of prejudice.  Although respondent argued that the complainant has totally frustrated legislative intent by the delay in this case and that the statutory requirement for serving complaints in 90 days will have no meaning whatsoever if complainant’s complaint is not dismissed, those arguments lack merit and, as previously mentioned, go to issues which the administrative law judge has no authority to consider.  Suffice it to say, however, that the statute is not effectively abnegated simply because no late-filed complaints may not be dismissed.  They will be dismissed when there is no justification for late filing and the employer is prejudiced by the delay.  A case-by-case approach should be taken unless and until the courts rule on the validity of the department’s rule making dismissal discretionary.

J.L.L.

 


[1]   Prior to the adoption of this rule, the failure to file a complaint when due was governed by part 5215.2500 (1995) which was a rule of the Minnesota Occupational Safety and Health Review Board.  It stated that the [f]ailure to file any pleading when due, may, in the discretion of the board or the administrative law judge, constitute a waiver of the right to further participation in the proceedings.”  This rule was repealed in April 1996.  See 20 SR 2428.

[2]   It is questionable whether part 5210.0570, subp. 5 (1996 Supp. No. 2) is authorized.  Keefe v. Cargill, Inc., 393 N.W.2d 425 (Minn. Ct. App. 1986).

[3]  The policy in this state is the same.  Keefe v. Cargill, Inc., 393 N.W.2d 425, 427(Minn. Ct. App. 1986) (dismissal a harsh remedy that should not be granted lightly).  See also, Housing and Redevelopment Authority of St. Paul v. Kotlar 352 N.W.2d 497, 499 (Minn. Ct. App. 1984), quoting Firoved v. General Motors Corp., 152 N.W.2d 364, 368-69 (Minn. App. 1967).